Pensioners missing out on £119.05 a week

Any pensioner not receiving at least £119.05 a week in income is missing out on free money from the government.

And new figures from Unbiased.co.uk calculate some £2 billion in pensions credit is going unclaimed each year with as many as 2.4 million pensioners not taking advantage of the government scheme.

"Our lack of saving for retirement remains a crucial problem for the UK and those that are in a position to save more should be doing so," said David Elms, chief executive of Unbiased.

"However, it seems that people are compounding the situation – be it through apathy or confusion – by failing to claim vital sources of retirement income in the form of tax credits."

And free government money is being missed by people contributing to pensions as well as those collecting them.

Higher-rate taxpayers are handing £739 million to the tax man for no good reason by not making additional voluntary contributions to company pensions schemes.

Additional voluntary contributions are designed to help increase the value of retirement funds by letting employees put more of their salary into company pensions which will lead to a larger pension fund at retirement.

These extra funds are also subject to the same the tax relief as standard contributions, making it important to use of this tax-efficient way of saving.

"Retirement savers are not making things any easier for themselves by overlooking the need to top-up their company pension pot," said Mr Elms.

"No one likes paying more tax than is necessary, and no one likes missing out on something that is rightfully theirs, so we are urging people to either kick-start their pension and tax planning or review their current situation with urgency. A discussion with a local IFA is a great place to start this process."